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When a Client Passes Away: Grief, Gratitude, and Financial Preparedness

Thu, 07 Aug 2025 13:35:25 GMT

When a Client Passes Away: Grief, Gratitude, and Financial Preparedness

As financial planners, we build relationships that go far beyond spreadsheets and investment returns. We learn about families, witness life’s milestones and guide our clients through them all. More often than not, at Belmore Financial Planning, they become friends.

When a client dies, it’s not just the closing of a financial file, it’s the closing of a chapter — one filled with trust, conversation, and connection. You remember their voice, their values, and the way they spoke about their children or their goals. You remember the calls that weren’t about money at all.

That mix of emotions is real.

As much as death is personal, it’s also part of the work we do.

When that time comes — whether expected or sudden — a strong financial plan can make a world of difference for the people left behind. One final act of care from the person who is no longer here.

Here are some of the ways careful planning can ease the burden:

Clear estate structures mean assets pass smoothly and quickly
Updated wills and beneficiaries reduce confusion and conflict
Organised documentation helps families avoid panic and paperwork paralysis
Trusts, protection policies, and tax planning can provide stability and security in an otherwise overwhelming time

When the family calls, they’re not asking about returns. They’re asking what to do. How to pay for the funeral. Whether they can stay in the house. What happens to the pension? Where the insurance documents are.

In those moments, your presence matters just as much as your planning. Your ability to say, “we’ve got this covered.”

That’s the heart of real financial planning.

When a client passes away, it’s more than the loss of a relationship — it’s a moment that reminds us why we do what we do.

We’re here to make life a little easier. To give people peace of mind. To make sure that when the time comes — and it always comes — the people left behind are not left lost.

It is a privilege to have been part of their life, and to have helped secure their legacy.

*Estate Planning, Inheritance Tax Planning, and Tax Planning are not regulated by the Financial Conduct Authority

If you would like assistance with any aspect of financial planning

please do get in touch

Tax Codings - a better understanding

Wed, 16 Jul 2025 11:02:34 GMT

Tax codings - a better understanding

In many of our client meetings, the subject of tax codings is discussed. This is only increasing with the rises seen in the State Pension amount coupled with the personal allowance remaining static meaning that more people are having a change in tax coding. In the majority of cases, this is so that tax that is due on their State Pension is being claimed from other sources.

Whilst we are not accountants, we feel it is important that clients understand what their tax codes mean and why they change. As much as anything else, this can give a ‘sense check’ as to whether the tax coding is right or not.

In the UK, a tax code is a series of letters and numbers used by your employer or pension provider to determine how much Income Tax to deduct from your pay or pension. HM Revenue & Customs (HMRC) issues these codes, and they are the only ones who can change them.

How a Tax Code Works

Numbers: The numbers in your tax code indicate how much tax-free income you are entitled to in a given tax year. This is usually based on your Personal Allowance, which is the amount of income you can earn before paying any tax. To get the tax-free amount, you typically multiply the number in your tax code by 10. For example, if your code is 1257L (the most common for 2024/25), it means you can earn £12,570 tax-free.

Letters: The letters in your tax code provide additional information about your specific tax situation and how it affects your Personal Allowance. Common letters include:

L: You are entitled to the standard tax-free Personal Allowance.

BR: All your income from this job or pension is taxed at the basic rate (often used if you have more than one job or pension).

D0/D1: All your income from this job or pension is taxed at the higher or additional rate respectively (also often used for a second job or pension).

K: Your income that isn't being taxed another way (e.g., state benefits or company benefits) is worth more than your tax-free allowance, meaning you'll pay tax on more than your taxable income.

M/N: Relates to the Marriage Allowance, where a portion of one partner's Personal Allowance is transferred to the other.

S/C: Indicates that your income is taxed using the rates applicable in Scotland or Wales, respectively.

0T: Your Personal Allowance has been used up, or it's an emergency code for a new job where details aren't yet available.

W1/M1/X: These are emergency tax codes, usually applied temporarily when HMRC doesn't have your full income details after a change in circumstances (like starting a new job).

Why is a Tax Code Important?

Your tax code is crucial for several reasons:

Ensuring Correct Tax Deduction: It directly determines how much Income Tax is deducted from your wages or pension throughout the year.
Avoiding Over or Underpayment: If your tax code is incorrect, you could end up paying too much tax (meaning you'll need to claim a refund from HMRC) or too little tax (which could lead to an unexpected tax bill at the end of the tax year, possibly with penalties).
Utilising Your Personal Allowance: Your tax code ensures that you receive the correct amount of tax-free income you're entitled to.
Reflecting Personal Circumstances: Tax codes are adjusted to account for changes in your life, such as getting a second job, receiving certain benefits, claiming the Marriage Allowance, or owing tax from a previous year. Keeping it updated ensures your tax is calculated accurately based on your current situation.

You can usually find your tax code on your payslip, P45 (when you leave a job), P60 (annual statement of earnings and tax paid), or by checking your personal tax account online with HMRC. It's important to regularly check your tax code to make sure it's correct. If you believe it's wrong, you should contact HMRC to get it rectified.

For those people who like an app, I have recently seen the HMRC app in action, and so far it does seem to be quite intuitive and allows you to find relevant information relatively quickly once you have set it up.

Estate Planning, Inheritance Tax Planning, and Tax Planning are not regulated by the Financial Conduct Authority.

If you would like further information on investments and pensions,

please do get in touch

Why 'Sitting Tight' is Important

Thu, 05 Jun 2025 16:03:31 GMT

Why 'Sitting Tight' is Important........

A couple of months ago, we were all waking up to the news that President Trump had imposed tariffs on trade, the markets reacted badly (they never like unexpected news), and markets fell.

As always, our message was to ‘sit tight’ and ‘don’t panic’ - because of the way we run our clients portfolios and ensure they have sufficient cash either within or outside of their portfolios for short term emergencies, it was time to use these rather than encash investments at a time where markets were considerably down. The only unknown in this scenario is when the recovery might be. History (although it cannot be entirely counted on) has always shown us that the markets will bounce back - we only have to look at Covid and Liz Truss’ budget as recent examples.

The media, however, always like to jump on bad news and seem to forget when there is good news to report.

Yesterday (4th June), I happened to look at what the main markets were doing both in the UK (FTSE 100) and the US (Dow Jones), just to give a high-level overview of where the recovery was, and this is what I found…….

There is no question of when Trump’s tariffs were announced and started, but the FTSE is pretty much back to the levels it was prior to the announcement.

The Dow isn’t quite back yet to where it was when Trump started his presidency, but it is considerably recovered from the tariff announcements.

The moral of the story, therefore, continues to be whenever the markets have a ‘shock’ and the media is full of doom and gloom, just hold fire - it will sort itself out, the only unknown is how long that takes.

It also shows why we believe geographical spread is an important part of a portfolio make-up as every stock exchange in the world will react differently to the same pieces of news……..

The content in this blog is for informational purposes only. All investments carry risk, and the value of your investments can go down as well as up.

Belmore Financial Planning is authorised and regulated by the Financial Conduct Authority

If you would like further information on investments,

please do get in touch

Riding the Investment Roller Coaster: Three Tips for a Smoother Ride

Tue, 22 Apr 2025 11:24:16 GMT

Riding the Investment Roller Coaster: Three Tips for a Smoother Ride

Investing can sometimes feel like being on a roller coaster. One moment you're thrilled as your investments climb, and the next, a sudden drop can make your stomach churn. It's a natural part of the journey, with both ups and downs to be expected. Decades of stock market history show that declines are a regular occurrence, with average intra-year drops of around 14% for the US stock market between 1979 and 2023. However, the good news is that despite these bumps, the US stock market has ended with positive returns in 37 out of the past 45 years.

So, how can you stay calm and make the most of your investment journey despite the inevitable twists and turns? Here are three key reminders:

1. Keep Your Eye on the Horizon

It's easy to get caught up in short-term market fluctuations, especially when you see a dip. However, it's crucial to remember the bigger picture. Instead of panicking over a near-term drop, try to focus on your long-term investment goals. As the saying goes, "this too shall pass," and history suggests that markets have generally trended upwards over the decades, rewarding investors who remain disciplined. Taking a step back from the immediate market noise can provide helpful perspective and ease your fears.

2. Stay in Your Seat

When the market takes a sharp downturn, the urge to sell your investments and avoid further potential losses can be strong. But this is often compared to jumping out of a roller coaster mid-ride – it's generally not a good idea! Attempting to time the market perfectly to dodge the worst days can actually lead you to miss out on the best days. Consider this: if you had invested $1,000 in the S&P 500 Index back in 1990 and left it untouched, it would have grown to $27,221 by the end of 2023. However, missing just the single best day during that period would have reduced your ending wealth by nearly $3,000. Missing the five best days would have cost you over $10,000. Over the long term, even a few key days can make a significant difference. So, like a roller coaster rider advised to keep their seatbelt fastened, investors may be well advised to stay invested.

3. Know Your Thrill Tolerance

Just as you might choose a gentler ride at a theme park if you're not a fan of extreme thrills, we aim to match your investment strategy with your risk tolerance. We can help you explore your investment objectives and time horizons and ensure you have a diversified portfolio that aligns with your comfort level and has an appropriate level of resilience. Different stock-bond asset allocations have shown varying performance over time, highlighting the impact of investment mix. By understanding your own "thrill tolerance," we can choose an investment approach that allows you to stay calm even when the market gets a little bumpy.

Investing doesn't have to be a stressful experience. By keeping these simple reminders in mind and talking to your adviser at Belmore, you can gain the confidence to navigate the ups and downs of the market and work towards your long-term financial goals.

Please remember that past performance is not a guarantee of future results and investments involve risks. The value of your investments can go down as well as up, and you may not get back the full amount you invested. Source: Dimensional

If you would like further information, or would like us to build you a lifetime cashflow please do get in touch

Buying Back State Pension Years

Wed, 05 Mar 2025 14:44:18 GMT

Buying Back State Pension Years

When we are building a client’s lifetime cash flow plan, we always ask any clients who are under the State Pension age to do a State Pension forecast. This enables us to see whether clients have built up sufficient year’s contributions to be eligible for a full state pension.

If they haven’t and it is unlikely they will work enough years to get the full quota, we look at the feasibility of buying som e additional years.

You can pay voluntary National Insurance contributions to fill gaps in your record and increase your State Pension. You can check your National Insurance record to see if there are any gaps.

There is an important deadline of April 2025 coming up as detailed below meaning that for some, immediate action could be wise.

In most (but not all) cases, it is worth buying back any missing years - especially if they are partly funded years to maximise entitlement to the full state pension.

Steps to consider ........

Check if you qualify for the full State Pension
Consider if there are other ways to increase your State Pension for free
Decide if the cost of voluntary contributions is worth it
Pay voluntary contributions before the deadline

Eligibility and deadlines .........

You can pay voluntary contributions to fill gaps between April 2006 and April 2016 if you're eligible
The deadline to pay for gaps between April 2006 and April 2016 is April 5, 2025
After April 5, 2025, you can only pay for voluntary contributions for the past 6 years

How to check your record.........

You can apply for a National Insurance statement from HM Revenue and Customs (HMRC)
You can check your National Insurance record on GOV.UK

Due to the number of years you can ‘gap fill’ changing, some people may need to take quick action before April 2025.

If you would like further information, or would like us to build you a lifetime cashflow please do get in touch

Charitable Donations

Fri, 28 Feb 2025 12:23:16 GMT

Charitable Donations

As the tax year end is approaching, most individuals concentrate on the common ways of reducing their tax bills like making personal pension contributions or gifting unused personal income tax allowance to a spouse.

One that often gets ‘forgotten’ is the tax implications of charitable donations and remembering to make a note of them over the course of a financial year to then input on a tax return.

Understanding the tax implications of charitable gifts is important for both the donor and the charity.

Here's a breakdown of key points that aren’t just limited to income tax benefits…...

Gift Aid:

* This scheme allows charities to reclaim basic rate tax on your donation, effectively increasing the value of your gift.

* If you're a higher-rate taxpayer, you can also claim back the difference between the basic rate and the higher rate.

Capital Gains Tax (CGT):

* If you donate certain assets, like shares or property, to a charity, you're generally exempt from CGT on the gain.

Inheritance Tax (IHT):

* Gifts to charities are typically exempt from IHT.

* Leaving a charitable gift in your will can also reduce the overall IHT payable on your estate.

* There are also rules that if you leave 10% or more of your net estate to charity, then the inheritance tax rate on the rest of your estate is reduced.

Donating Shares or Property:

* Donating qualifying shares, securities, or land can provide income tax relief.

* This allows you to deduct the market value of the asset from your taxable income.

Company Donations:

* Companies can deduct charitable donations from their pre-tax profits, reducing their corporation tax liability.

Important Notes:

* It's crucial to ensure that the charity you're donating to is a registered charity to qualify for these tax benefits.

* Tax laws can be complex, so seeking professional financial advice is recommended, especially for large or complex donations.

In essence, charitable giving in the UK is encouraged through various tax reliefs, benefiting both the charities and the donors.

If you would like further information, please do get in touch

Taking Benefits from Final Salary Pensions

Tue, 14 Jan 2025 14:41:02 GMT

Taking Benefits from Final Salary Pensions

At Belmore we are seeing a few similar cases with our clients about taking benefits from Final Salary Pension schemes

The History

Individuals who are now in their late 50’s/early 60’s are caught in the period of time where final salary pension schemes have become less common (particularly in the private sector) and historic schemes are caught with differing retirement ages depending on when the member was employed and when the scheme changed its rules/legislation for retirement ages.

The Implications

Gone are the days where someone reaches a particular age and all their pensions became payable at once - that would too easy!

This means that many people have relatively small pension schemes relating to previous employment that they can start receiving - most commonly at ages 60, 65, 67 - yet they are still working and either cannot afford to fully retire or don’t want to.

The Options

As a general rule, a member will receive a pack detailing their options a few months before they reach the scheme retirement age. This will outline the options available including whether to take tax-free cash and the impact (if any) it has on the income.

When choosing the best option there are a few important things to consider……..

Should I take the tax-free cash?

This decision depends on individual circumstances. Some people need tax-free cash to clear debt, others use it to provide an emergency fund if their cash reserves are lower than is comfortable.

It also depends on the implication it has on the income being offered, the need for secure income and what other sources of income there will be available in retirement.

Should I defer taking my income?

As a rule of thumb the answer to this is normally ‘no’ as the income you would miss out on in the deferment will take a considerable number of years to ‘catch up’ on to break even in your bank account.

With the majority of schemes, the benefits once in payment will increase by RPI or CPI or similar.

It is important to remember that aside from a spouse's pension (often half the income or lower of the member’s income) these schemes die with you so the object of the exercise is to maximise what you get out.

Does taking final salary pension income affect my ability to make personal pension contributions?

No, taking benefits from a final salary scheme does not affect your ability to make contributions into a personal pension.

Will I need to do a tax return?

No, the final salary scheme will deduct tax at source.

What if pension income puts me into higher rate?

If individuals don’t need the additional income and it puts them into higher rate tax when added to their PAYE income then there is an opportunity to make higher personal pension contributions to claim back the higher rate tax.

If you would like further information, please do get in touch

Personal Taxes and the Budget

Thu, 31 Oct 2024 10:59:05 GMT

Personal Taxes and the Budget

Tax Thresholds

• Personal tax thresholds have remained frozen until 2028, meaning fiscal drag will continue as planned.

• From 2028/2029, thresholds are expected to increase in line with inflation.

Minimum Wage

• National Living Wage will increase by 6.7% to £12.21 per hour starting next April.

• Minimum wage for 18-20-year-olds will rise by 16.3% to £10 per hour.

Non-Domiciled Status

• The non-domiciled tax system is to be abolished from April 2025 (Conservatives previously scrapped the non-domiciled special status in their Budget, but Labour has now further amended the rules, removing the option for non-domiciles to move funds offshore ahead of the full change in April 2025).

Capital Gains Tax (CGT)

• Capital Gains Tax (CGT) rates have increased to bring all assets (including residential property) to the same levels of 18% for basic rate taxpayers and 24% for higher rate taxpayers.

• Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes have been extended to 2035.

• Primary residences will continue to be exempt from CGT.

• CGT on carried interest will rise to 32% from 2025, specifically targeting the fund management industry.

Inheritance Tax (IHT)

• The Inheritance Tax (IHT) nil rate band remains frozen at £325,000 for individuals, while the residence nil rate band remains at £175,000 for estates up to £2 million. Both thresholds are frozen until 2030.

• From April 2026, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax, but for assets over £1 million, inheritance tax will apply with 50% relief, at an effective rate of 20%.

• A 50% relief now applies in all circumstances on inheritance tax for shares on the alternative investment market, and other similar markets, setting the effective rate of tax at 20%.

Tax on Pensions

• The 25% tax-free lump sum for individuals drawing from their pensions has been retained.

• Starting in 2027, pensions will once again form part of the deceased's estate for IHT purposes (so the spousal benefit will apply to this).

• The triple lock system on the state pensions has been maintained.

Stamp Duty Land Tax (SDLT)

• First-time buyers purchasing a property will now pay SDLT at the 2025 rate of 5% on properties priced above £300,000 and below £500,000.

• For first-time buyers purchasing a property priced above £500,000, the standard SDLT rates for 2025 will apply.

• The SDLT surcharge for second and additional properties has been increased from 3% to 5%, effective from 31st October 2024.

Source: Timeline budget breakdown

If you would like further information, please do get in touch

Client Explainer - Bonds

Fri, 25 Oct 2024 11:36:58 GMT

Bonds

When governments or companies need long-term financing (2 to 30 years), they issue Bonds in the capital market.

Government Bonds are called Gilts, while company Bonds are known as Corporate Bonds. Both are collectively referred to as Fixed-Interest Securities, as they pay interest either at a fixed rate (Conventional Gilts / Bonds) or the interest they pay is Index-linked.* Bonds may also be called Debentures, Loan Notes, or Loan Stock.

*Some Bonds, known as Zero Coupon Bonds, don't pay regular interest but are sold at a discount, with the full face value repaid at maturity.

Bonds can be bought directly from issuers or through collective investments like Unit Trusts, OEICs, and Personal Pensions. Essentially, buying a Bond means lending money to the issuer in exchange for regular interest payments (typically every six months) and the return of your capital at maturity.

Corporate Bonds tend to offer higher interest rates than bank savings accounts due to the higher risk of default. The risk is reflected in the issuer's credit rating, which influences the coupon rate—the lower the credit rating, the higher the risk and coupon.

Bond prices in the secondary market fluctuate with interest rates. When rates fall, Bond prices rise as coupons become more attractive compared to bank savings. Conversely, when rates rise, Bond prices fall as bank savings become more competitive.

The Government provides tax incentives for buying Gilts and qualifying Corporate Bonds. The yield on Bonds represents the return relative to the price paid, with the fixed coupon amount remaining constant while the Bond price may vary.

Sources: https://nextgenplanners.mn.co/posts/investments-r02-j10-day-2-learning-outcome-1-part-2

If you would like some further information on Bonds, please do get in touch

Client Explainer - Equities (Shares)

Mon, 21 Oct 2024 08:57:33 GMT

Client Explainer - Equities (Shares)

Buying shares means owning part of a company, granting you shareholder rights, often including voting on key issues. Shares can be purchased directly via the stock market or as part of pooled investments (this is the most common as part of a pension or investment portfolio). They may be new shares from an Initial Public Offering (IPO) or existing ones traded publicly. Investments can range from small (Private Equity) to large (FTSE-listed) companies, with the AIM market somewhere in the middle.

The goal is for the share value to grow with the company’s profitability. Dividends may be paid, typically higher from larger companies, while smaller companies may offer more potential for capital growth. However, company performance isn't guaranteed, and some may reinvest profits without growing.

In simple terms, shares are an investment in companies that produce real goods and services. The prices of these goods and services will increase with inflation, as will the profits (hopefully), providing investors with a return over inflation.

Share prices are influenced by investor sentiment and economic forecasts. Shares tend to be riskier than other asset classes, fluctuating more but offering the potential for higher long-term returns. However, this is not guaranteed, and investors should be prepared for volatility and potential losses. It is also important to note that should investment be made in a company that becomes insolvent, then it is likely that most, if not all of that investment will be lost, as shareholders are the last in line to be re-paid.

To reduce risk, it is common practice to diversify across companies and asset classes. A crude example of this would be investing in a company that manufactures ice cream and also investing in a company that makes umbrellas. In the summer you would expect the ice cream company to be doing very well, not so much in the winter, but that’s where the umbrella company would take over!

Investing in larger companies is another way to reduce risk within the equity market as they tend to have longer trading experience than smaller start-up companies and therefore by their nature are lower risk.

Long-term investments (5–10+ years) help smooth out short-term fluctuations, with equities historically outperforming bonds and cash. This makes shares a good option for long-term investing.

Sources: CII R01 Study Text 2024/2025 - Chapter 2 Serving the retail consumer

https://nextgenplanners.mn.co/posts/investments-r02-j10-day-3-learning-outcome-1-part-3

If you would like some further information on equities, please do get in touch

Client Explainer - Investment Bonds

Tue, 01 Oct 2024 12:11:28 GMT

Investment Bonds

An Investment Bond offers medium to long-term growth (5-10+ years) and access to a wide variety of funds. As with all investments, its value can fluctuate, and you may not recover the full amount invested.

Investment Bonds are structured as single-premium 'Life Insurance' policies, with a portion paid out upon death, though they function as investment products. These typically require a minimum investment of £5,000 to £10,000, and may have term restrictions and varying charges.

You can withdraw up to 5% per year tax-deferred until the Bond is fully cashed in. This makes Investment Bonds attractive for tax-efficient income or wealth transfer.

UK Investment Bonds are taxed under UK Life Fund rules, with the basic rate of Income Tax considered paid, meaning no additional Capital Gains or basic rate tax liability on gains. If you're a higher or additional rate taxpayer now but expect to become a basic rate taxpayer (e.g. in retirement), deferring withdrawals beyond the 5% limit could reduce your tax liability.

Chargeable events triggering Income Tax liability include withdrawing over the 5% allowance, full surrender, death of the policyholder, or maturity of a Bond.

Assignment, or transferring ownership, allows tax planning between spouses or civil partners, with the gift exempt from Inheritance Tax and no Capital Gains Tax on the transfer. Assignments must be unconditional and outright. Special rules apply for Trustee-held Bonds.

If you would like some further information on Bonds, please do get in touch.

Sources:https://www.mandg.com/pru/customer/en-gb/our-products/investment-products/investment-Bonds, https://techzone.abrdn.com/anon/public/investment/Taxation-of-Bonds, https://chasebuchanan.com/assignment-of-an-investment-Bond-2/#:~:text=An%20assignment%20refers%20to%20the,called%20a%20deed%20of%20assignment., https://www.mandg.com/wealth/adviser-services/tech-matters/investments-and-taxation/planning/tax-planning-uk-Bonds#:~:text=This%20planning%20is%20often%20used,must%20be%20outright%20and%20unconditional .

If you would like some further information on Bonds, please do get in touch

What is the Budget going to contain?

Tue, 10 Sep 2024 11:04:56 GMT

What is the Budget going to contain?.......

We are more regularly than normal being asked by clients what we think the forthcoming budget on 30th October will contain.

The honest answer is - we don’t know! And neither does anyone else at the moment……

Since the announcement of the cut to the Winter Fuel Allowance, there has been a lot of speculation about what may or may not be included in the budget and there have been clear warnings from the government that it's not necessarily going to be something to celebrate.

Whilst we would like to say that the public has been told that increases to the rates of Income Tax, National Insurance and VAT have already been ruled out, we would not like to be completely certain until the budget is announced, as experience tells us that U-turns in policy cannot be ruled out.

If this is the case though, and judging by what the Prime Minister has said about tax rises being necessary, it seems that the general consensus is that Capital Gains Tax, Inheritance Tax or a Wealth Tax, VAT and Pensions may be targeted.

We would like to have a crystal ball so that any pre-budget work can be done, but in reality, we just don’t know what it might contain and would just be guessing. Therefore at Belmore, we are treating everything as ‘business as usual’ and dealing with the tax rules that are in place at the current time.

We will of course be looking closely at the budget (probably along with most of the nation) on 30th October with interest, and translate what is said in parliament to everyday situations as soon as possible for our clients.

If you would like any advice on your pensions or investments then

please do get in touch

Markets Over the Previous Couple of Weeks

Wed, 28 Aug 2024 10:17:50 GMT

Markets Over the Previous Couple of Weeks

Whilst a large majority of the public have been enjoying their summer holidays, the markets decided to take a leaf out of the Paris Olympics book and do their own form of gymnastics.

It started with a market correction in Asia where the Japanese stock market plummeted by 12.4% which represented the sharpest sell-off since ‘Black Monday’ back in 1987. This was then added to by the VIX index (a measure of market volatility often referred to as Wall Street’s ‘fear gauge’) surging more than 40 points from its average level that was largely caused by a fear that the US market might slip into recession (despite major analysts thinking this scenario is unlikely).

By the time this had all happened, markets worldwide felt the impact of the shock and although not to the same degree, Chinese, Indian and Australian markets showed modest declines. Whilst the FTSE 100 went down by 2-3% this was relatively stable compared to other world markets.

Since this episode, markets have bounced back - as an example, the Japanese market closed on 27th August being within 200 points to where it opened a month previous, before the downturn.

This goes to show that our continuing message is to stick to the plan and ignore the emotions of investing. The timings of the markets is nearly impossible to gauge, and attempting to do it would be likely detrimental - it is the time in the market that counts more.

If you would like to discuss this any further or review your investments then please do get in touch

Political Impact

Fri, 28 Jun 2024 12:05:35 GMT

Political Impact

With less than a week to go until the General Election, some clients are asking about what financial impact there might be going forward.

Whilst it is impossible to predict what legislation changes may come in (although the manifestos make promises, nothing is set in stone until it goes through parliament), one thing that history has shown us is that the markets will still grow no matter who is at number 10.

Source: Dimensional

Whichever political party wins the election, there is likely to be a budget in the coming weeks after the election and this is when everyone will know for sure the changes (if any) that are to be made.

At this time, we will issue some further updates. Meanwhile, it is business as usual so if you would like to talk about your finances then please do get in touch.

If you would like any assistance in making a financial plan for the future please do get in touch

Tax Returns

Thu, 23 May 2024 10:45:13 GMT

Do I need to do a tax return?…..

In the recent press there has been a lot of talk about more pensioners needing to do tax returns due to the indexation of the State Pension in recent years and the fact that Income Tax thresholds have not increased.

It is true that more people above State Pension age are therefore going to fall into this ‘trap’.

However, there’s also another sector of people who may find it is actually in their interests to do a tax return and that is those people who find themselves as a higher rate tax payer who are making pension contributions either through auto-enrolment or into personal pension schemes.

When making personal pension contributions, the pension scheme will automatically add basic rate tax to the contributions giving an uplift of 20%. However, if you are a higher rate tax payer it also has the effect of increasing your basic rate tax banding by the amount of the personal contributions (not those made directly by an employer) meaning that you can claim back some higher rate tax via your tax return.

You do not necessarily have to employ an accountant to do a self assessment tax return, if you are employed by one employer and have your P60, P11D (if you get one) and your pension contribution history then you can do it yourself.

As well as potentially claiming some tax back, this also offers opportunities to make larger personal pension contributions and benefit from the additional tax relief. If you would like to talk more about how this works then please get in touch.

If you would like any assistance in making a financial plan for the future please do get in touch

Normal Pension Minimum Age Changes - Advanced Warning

Wed, 24 Apr 2024 10:07:30 GMT

Normal Pension Minimum Age Changes - Advanced Warning

Currently, most people can access their personal pensions at age 55. Some people do this to take the tax-free cash to pay off mortgages and other debts, others start to receive an income as they take a glide path into retirement.

From 6th April 2028 this age is increasing to 57 and when you were born will determine whether or not you are affected.

If you were born before 6th April 1971…….

You won’t be impacted because you’ll already have reached age 57 by 6 April 2028.

If you were born between 6th April 1971 and 6th April 1973……..

You’ll have an opportunity window from your 55th birthday to 5 April 2028 to access your pension savings before the Normal Pension Minimum Age increases to 57. If you choose not to take any pension savings during this period, you will need to wait until your 57th birthday.

If you were born after 6th April 1973……..

The earliest age you will be able to access your pension benefits is age 57

Whilst 2028 seems a long time away, individuals who may be planning to access their pension plans at age 55 and were born after 6th April 1971 need to be aware of this delay in accessing personal pensions now so that they have time to alter their financial plans appropriately with nothing being a nasty surprise……..

If you would like some assistance in making your financial plan, please do get in touch

Tax Year Changes

Tue, 09 Apr 2024 12:03:05 GMT

Tax Year Changes

Entering a new tax year means a change to some of the rates/allowances that we have been used to and some have stayed the same. This quick guide is designed to give you an overview of some of the most common………

Allowances - 2024/25

ISA allowance - £20,000 (no change)

JISA allowance - £9,000 (no change)

LISA allowance - £4,000 (no change)

Capital Gains Tax allowance (individual) - £3,000 (2023/24 was £6,000)

Capital Gains Tax allowance (most Trusts)- £1,500 (2023/24 was £3,000)

Dividend Tax allowance - £500 (2023/24 was £1,000)

Income Tax Rates - 2024/25

Personal Allowance - £12,570 (no change)

Basic Rate Tax (20%) - £12,571 - £50,270 (no change)

Higher Rate Tax (40%) - £50,271 - £125,140 (no change)

Additional Rate Tax (45%) - £125,141 + (no change)

Dividend

Basic Rate - 8.75% (no change)

Higher Rate - 33.75% (no change)

Additional Rate - 39.35% (no change)

Capital Gains (Individuals) - 2024/25

Capital Gains Tax on everything except property

Basic Rate 10% (no change)

Higher Rate 20% (no change)

Capital Gains Tax on property

Basic Rate 18% (no change)

Higher Rate 24% (2023/24 was 28%)

As always, if you would like to discuss any of the areas above, or any other aspect of the budget or your financial planning then please get in touch

Budget 2024 - Our Thoughts

Thu, 07 Mar 2024 12:24:45 GMT

Budget 2024 - Our Thoughts

The general consensus within the industry is that the budget was a little underwhelming.

Thanks to the leaks the day before, even the 2p cut in National Insurance wasn’t a surprise.

At the Belmore offices, the two areas that have caused the most discussion were the cut of the higher rate of property capital gains tax and the ‘British ISA’......

Property Capital Gains Tax

The reduction from 28% to 24% for the higher rate of property capital gains tax is good news for clients. We are finding an increasing trend of clients selling buy-to-let properties and second homes so this tax cut will be beneficial to those individuals. Most clients are realising that the illiquidity of property (you can’t just sell part of a property) and the running costs of a second property are making it more attractive to sell them and invest the proceeds to help them achieve their financial goals.

British ISA

It has to be said that this seems to be causing a lot of people to walk around with puzzled looks and scratching their heads. The reasoning behind giving an extra £5,000 ISA allowance for investing in the British economy is understandable.

How it works in practice has yet to be confirmed -

Will existing ISA portfolios containing exposure to UK investments mean that this element qualifies?
How will it be administered?
What qualifies as a British investment? - is it a company with headquarters in the UK?
What happens if you invest in a British ISA and then want to do a fund switch further down the line?

The devil is really going to be in the details of this one. No one seems to know the mechanics of it, or whether the industry in general will widely offer them, given no doubt there will be additional administration burdens of setting them up and running them.

As always, we will keep you updated with the rolling out of the ISAs and further articles on this will follow in due course.

Economic Forecast

Whilst it is just a forecast, the Chancellor did say that inflation should reduce further nearer to the government's target of 2% in the next few months.

Normally this will encourage the Bank of England to reduce interest rates gradually.

Whilst this is good news for those with mortgages, it may also mean that investors start to see interest rates on savings start to reduce. With this in mind, it may be that some of the fixed-rate cash accounts start to see their rates fall in the not-so-distant future, and shopping around for rates could be advantageous.

The anticipated reduction in inflation and interest rates should also further help Bond markets recover from the falls seen in the last couple of years.

As always, if you would like to discuss any of the areas above, or any other aspect of the budget or your financial planning then please get in touch

Financial Regrets??

Tue, 27 Feb 2024 11:57:43 GMT

Financial Regrets??

A recent poll carried out by Unity Mutual of 2,000 people said that 51% had financial regrets.

In amongst the results……..

34% of people wished they had learned about finances at a younger age

24% of people wished they had paid more into a pension each month

24% of people wished they had started a pension at a younger age

46% of people wished they had put money into a savings account each month

These results support what we find when speaking to potential clients about their existing financial position when often not talking to an adviser means they are missing out on tax breaks or understanding the impact of certain financial decisions.

It also shows that for anyone, a discussion around the dinner table with family members can be important - not necessarily to come up with the answers but to start the conversation.

If these results have made you think about your own situation and you’d like to speak to one of our advisers then please get in touch

Tax Year End Reminders!

Thu, 25 Jan 2024 12:35:12 GMT

Tax Year End Reminders!

With everyone doing the annual scramble to get their tax returns in, here at Belmore we’re beginning to turn our focus to the tax year end (and in the hopes of some warmer and drier weather by then)!

As well as the ‘normal’ ISA allowances (£20,000 for 2023/24) we’re also reminding people of the increased pension contribution annual allowance of £60,000 for 23/24. That combined with the changes to the pension lifetime allowance rules is leading to some financial planning which, for a long time, has not been possible for some.

A lot of companies also have their company year ends to coincide with the tax year end - meaning that making company pension contributions to utilise this increased pension allowance is also attractive to reduce Corporation Tax.

There is much talk (and no doubt it will only increase) about what may or may not be contained within the budget, particularly on the topic of Inheritance Tax which many thought was going to be addressed in the autumn statement but nothing was said.

A question we regularly get asked by our clients is about what happens if there’s a change of government, will allowances and rules be changed back? The short answer is we don’t know - any advice and decisions should always be made with the facts of today rather than speculation of what might be! Far be it from us to comment that it’s not unusual for politicians to change their minds…….

If you would like any help in planning your finances to utilise allowances either before or after the tax year end then please contact us

If you would like to discuss the above or anything else around your financial planning then please do get in touch

Updating the Trust Register

Tue, 09 Jan 2024 10:27:14 GMT

Updating the Trust Register.

Back in the summer of 2022, we were busy reminding and helping clients to complete any online Trust registrations that were needed. On 1st September 2022, a deadline passed which meant that all Trusts had to be registered with HMRC regardless of whether tax returns had to be completed annually.

At the time, all Trustees were busy trying to navigate the process and could either do it on their own or have assistance in doing this.

Everyone got their heads around the process and the data that was required to complete the registrations.

Fast forward 18 months

Any new Trusts being set up are needing to be registered which is now a normal part of the process.

However, we are finding that clients are coming ‘unstuck’ when it comes to “maintaining” the registration. Updates may be needed because Trustees change, beneficiaries or Trustees have died, or the Trust wishes to make new investments and require a Trust Registration Certificate

Who is responsible?

A lot of Trustees don’t realise that it is their responsibility to keep the register up to date with any changes. We are finding that these updates are beginning to fall between the cracks as Trustees are wrongly assuming that a third party (either ourselves or a solicitor) can do this for them.

Due to the way it is set up, it is the lead Trustee who has the login details for HMRC and who are able to make the necessary changes.

At Belmore, we have seen first-hand what the pages look like once Trustees are logged in and we think it is fair to say that it could be simpler!

What can we do to help?

We are restricted in the help we can give to Trustees as we cannot do this for them, however, the team have written little guides for ‘how to’ do things on the site as we are coming across them …….. If you would like any of these guides then please get in touch.

If you would like to discuss the above or anything else around your financial planning then please do get in touch

Autumn Statement - Pensions update

Mon, 04 Dec 2023 10:04:59 GMT

Abolition of the Lifetime allowance.

As expected following the last budget, in the Autumn statement the government confirmed it will introduce legislation to abolish the Lifetime Allowance with effect from 6 April 2024. The legislation will aim to clarify the taxation of lump sums and lump sum death benefits. It will also detail the application of lifetime allowance protections and the tax treatment for overseas pensions.

The legislation should also provide clarity concerning transitional arrangements and reporting requirements for pension schemes.

What more do we now know?

We have said for a while that with the pension changes, the devil was in the details and away from the headlines, HMRC quietly updated the original abolition of the lifetime allowance policy paper it first published on 18 July. This clarified several of the potential issues the industry had identified in the initial proposals and we expect to see this reflected in the legislation.

The key changes to the policy document are:

• The updated policy paper confirms that beneficiary drawdown and annuity payments will continue to be paid free of income tax when the member dies under the age of 75.

• Payments made under the trivial commutation, small pots and winding up lump sum rules will not be included in the new limits for tax-free cash payments and tax-free lump sum death benefit payments.

• It would seem there may be an opportunity for some who have previously taken benefits without taking their tax-free cash entitlement to claim tax-free cash on their remaining funds where previously they couldn’t because they would be restricted by the lifetime allowance.

What is replacing the Lifetime Allowance?

As a reminder, the plan is to replace the lifetime allowance with two limits – a lump sum allowance to limit tax-free cash payments and a lump sum and death benefit allowance to limit the total of tax-free payments both in lifetime and on death.

In a change to the previous rules, only lump sum payments will be tested whereas income payments can be made without restriction (but subject to income tax).

Other Pension-Related Items

It would seem that the reality of workplace pensions is beginning to filter through as there is potential for employees to end up with multiple small pots as they move employment and these can become difficult to keep track of. To tackle the problem, the Chancellor announced plans to create a ‘pot for life’ which aims to allow workers the option to have one pension plan and would require employers to pay contributions to it, rather than joining new workplace schemes each time they moved jobs. The government will also consult on plans to allow a small number of authorised schemes to act as a consolidator for pension pots under £1,000.

Whilst this is a positive move in terms of the employee, it does raise questions of how an employer would administer this easily as in theory, it could lead to a Direct Debit payment per employee into different schemes.

National Insurance and salary sacrifice

In the autumn statement, there was also an announcement which reduced employee National Insurance by 2% from 6th January 2024. Whilst not directly related to pensions the 2% reduction in the employee national insurance could see some sacrifice arrangements changing if they had been set up to keep the take-home pay the same.

Despite this, salary sacrifice still generally remains the most attractive way of making contributions where the option is available.

If you would like to discuss any of the items mentioned above or anything else around your financial planning then please do get in touch

Autumn Statement - What we know so far……..

Thu, 23 Nov 2023 10:19:52 GMT

With the Autumn Statement having taken place today, there are headlines about the announcements the Chancellor has made. However, out of the headlines (so far!) is the specific information some of our clients were waiting for about the changes in pension legislation.

However, while we are waiting for these to filter through, a recap on the headlines so far that we believe will affect our clients the most are…….

National Insurance:

Employee rate cut from 12% to 10% from January 2024

Class 2 contributions (relevant to self-employed) are to be abolished

Class 4 contributions (relevant to self-employed) are to be cut from 9% to 8% from April 2024

Pensions:

The triple lock was honoured with State Pensions to increase by 8.5% from April 2024 (Full State Pension will be £221.20 pw)

Work is to begin to allow employees to have one pension pot that they can nominate an employer to pay contributions into

What was ‘missing’:

There was considerable speculation in the media just prior to the statement about the chancellor changing Inheritance Tax rules. So far, we have not seen any changes being reported in the headlines and tax thresholds remain unchanged too

The Economy in General:

Between the chancellor and the OBR, there isn’t too much change in the forecasting for the UK economy, the short-term seems to be slightly brighter whilst the longer-term figures aren’t quite as high as was previously predicted. The positive seems to be that short term, there is now a predicted positive figure rather than a negative one. In terms of inflation, it is anticipated that it won’t return to the 2% target until 2025.

As more details emerge in the next few days we will be releasing more blogs updating the information as we are able

If you would like to discuss any of the items mentioned above or anything else around your financial planning then please do get in touch

Autumn Statement

Wed, 15 Nov 2023 11:37:03 GMT

Next week sees an important date in the financial calendar of the Autumn Statement. This should give some clarification on some of the big issues surrounding the new pension legislation that was announced in March 2023 along with some of the more normal announcements such as the tax rates that will be effective for 2024/25 and decisions on the increases to State Pensions amongst other things.

As mentioned in our blog when the pension changes were first announced, there are still some questions yet to be answered. There are a few key unanswered questions that have the potential to affect our clients and the planning we do for them which are waiting to be answered. Amongst them, the question about what is happening to the tax status of beneficiary drawdown pensions where the pension owner died before age 75. At the moment the income is paid to the beneficiary tax free, but whilst we know this is changing going forward in 2024/25 there has been no confirmation about legacy cases - it would seem somewhat cruel if they were suddenly taxed on the income being received if the legislation were to be taken back retrospectively.

There are also unanswered questions about small pots, stand-alone lump sums, and details around how/if existing lifetime allowance protections will impact tax-free cash limits. Further guidance on all these areas is needed in order for appropriate advice to be given to clients.

If you would like to discuss any of the items mentioned above or anything else around your financial planning then please do get in touch

ID and Fraud Scams

Mon, 16 Oct 2023 11:22:29 GMT

This is just a reminder as we have been made aware of one of our clients falling victim to a fraud scam.

This has been a very upsetting and unnerving experience for the individual concerned and we want to ensure that no one else suffers the same loss. Those targeted experience much distress, both emotionally and potentially financially.

Things to look out for…..

Please see below some key points to bear in mind

If you are called by your Bank they will never mind you calling them back to make sure it is a genuine call - phone the number from a website or your bank card, not a number you are given
You will never be asked by a Bank to confirm your entire account details over the phone, only certain digits or a security password
If you receive a text message from any business with a link then always be wary of what you are clicking on
If you receive post from a bank or financial institution that you do not recognise then contact them immediately in case an account has been opened in your name that you are not aware of
If you are paying for goods or services online then make sure it's on a secure connection to reduce the risk of those details being cloned
Regularly change passwords and PINs on accounts
Shred any confidential information
Watch out for unusual transactions on bank statements
Be wary of what you post on social media that might give away sensitive information that fraudsters could use
Be aware of the latest scams, be it courier or post office delivery charges, online sale sites, or door-to-door charity canvassers. Criminals will always be changing the way they scam people

Above all, if you have any doubts then pick up the phone and check - if the company is genuine no one will mind a call to make sure.

If you are on the receiving end of any type of identity theft or scam then please do let us know so we can take any steps needed.

What is Belmore doing to help?

Please remember, we are always here if you would like to talk to us about any queries or concerns. If something does not seem right, use us for guidance and advice.

In recent years, we have taken steps to increase security in the way we communicate with clients by introducing our Client Portal for storing personal information. If you are not already familiar with this or would like to be set up to receive communications in this way then please get in touch.

If you would like help with any aspect of Financial or Estate Planning then please do get in touch

Trusts

Tue, 15 Aug 2023 08:09:06 GMT

What is the purpose of a Trust?

A Trust is a legally binding agreement for managing assets (money, investments, land, or buildings) for the benefit of another person or people (the beneficiaries). Assets provided by the settlor are held and managed by one person or people (the trustees).

Trusts can be organised for several different reasons:

To control and protect family assets
When a beneficiary is too young to handle their financial affairs
When someone cannot handle their financial affairs because they’re incapacitated
To pass on assets while a settlor is still alive or when a settlor dies (a ‘Will Trust’)
Under the rules of intestacy if someone dies intestate (without a Will in England and Wales)

The settlor sets out in a document called a Trust Deed how their assets should be used.

The trustees are the legal owners of the assets and must use them as per the settlor's wishes as set out in their Will or the Trust Deed. They must manage the Trust, deciding on how to use or invest the assets, and pay any tax due. You can have up to four trustees and it is important you choose people you can trust to carry out your wishes.

The beneficiary may be one person or a defined group (such as a family). They may benefit from the income of a Trust for example the rental income from a house held in the Trust, the capital for example receiving shares when they come of age, or both income and capital.

Trusts can be set up at any time or written into a Will. It will be decided on what the assets are, who the trustees and beneficiaries will be and when the Trust is to become active.

Different Types of Trust

Depending on how you wish to control your assets, there are many different types of Trust available:

A Bare Trust is the most simple type. It gives all assets to a beneficiary or beneficiaries over the age of 18 (in England and Wales). These types of Trust are usually used to pass on assets to a young person and are held by the trustee(s) until the young person is of age.

Interest in Possession Trusts means that the beneficiaries can gain access to the income immediately but they cannot control the assets. They must also pay tax on the money they receive. This is most commonly used by a settlor to give their partner access in their lifetime and then when the partner dies, the assets would be passed to the settlor’s children.

Discretionary Trusts are where the trustee(s) have control over the assets and any income generated. They decide on how and when they will be given to the beneficiaries and any restrictions to impose on them. This kind of Trust is usually set up for the benefit of grandchildren where the parents are made the trustees.

Mixed Trusts are a combination of different types of Trust. It might give the beneficiaries the right to income from half a Trust Fund for example. The different parts of the Trust are treated in accordance with the tax rules that apply to each part.

A Trust for a vulnerable person would be used if the only beneficiary is vulnerable, for example, someone who is disabled or an orphan, this type of Trust benefits from less tax being payable on the income.

Non-resident Trusts can be set up if the trustee(s) live outside the UK. This may mean that the beneficiaries could pay less tax.

Settlor-interested Trusts are where the settlor or their spouse / civil partner benefits from the Trust which can be an Interest in Possession Trust, an Accumulation Trust or a Discretionary Trust.

Parental Trusts for children are set up by parents for children under 18 who have never been married or in a civil partnership. They’re not a type of Trust in their own right but will be either a Bare Trust, an Interest in Possession Trust, an Accumulation Trust, or a Discretionary Trust.

Taxes

Different types of income from Trusts have different rates of income tax. Income Tax on income from the Trust is paid by the trustee(s), but the ‘settlor’ is responsible. This means that the trustee(s) pay Income Tax on the Trust income by filling out a Trust and Estate Tax Return and they give the settlor a statement of all the income and the rates of tax charged on it.

The settlor tells the HMRC about the tax the trustee(s) have paid on their behalf when filling out their Self Assessment tax return.

Each type of Trust is taxed differently. If you put assets into a Trust, inheritance tax will need to be paid on it at various points in the lifecycle of the Trust.

Capital gains tax on Trusts taxes the profit when assets that have increased in value are put into or taken out of a Trust.

If you would like further information or advice on setting up a Trust, please do not hesitate to contact us, we will happily talk to you about your circumstances and future plans.

Sources:

https://www.lawsociety.org.uk/public/for-public-visitors/common-legal-issues/trusts

https://www.gov.uk/trusts-taxes/types-of-trust

If you would like help in any other aspect of your Estate Planning then please do get in touch

Do you know someone currently aged between 13 and 21?.....

Fri, 28 Jul 2023 09:45:05 GMT

…..If so, they would have had a Child Trust Fund (CTF) automatically opened for them which becomes available when they reach age 18.

The accounts were opened by a government funded minimum of £250 meaning any children born between 1st September 2002 and 2nd January 2011 will have an account with some money in it.

Until 31st July 2010, the government added a further minimum of £250 if the child turned age 7 before that date.

HMRC estimates that the average balance of Child Trust Funds is around £2,100 and of the 6.3 million CTFs that were opened, up to a million of them are ‘lost’ meaning the account holders have forgotten about them or never been aware they existed.

How do I access the accounts?

If you know the bank, building society or investment provider then you can contact them to get the information regarding the account.

If you don’t know the account provider then HMRC have a tool - https://www.gov.uk/child-trust-funds/find-a-child-trust-fund where you can find out which provider your CTF is with.

What can be done with these accounts?

If the child is still under 18 then it can be transferred to a Junior ISA and be managed appropriately. If this is the case, please contact us and we will be happy to guide you through the options.

If the child is over 18 then they can access the account themselves and withdraw the money. This means there are a whole host of options available but a popular one is to move the money to a LISA and get the government bonus of 25% towards the purchase of a first property. Again, please contact us and we can explain the options available.

If you would like help in any other aspect of your Estate Planning then please do get in touch

Housekeeping

183:875219396 (Jonathan Mapp) — Tue, 11 Jul 2023 09:31:02 GMT

As years go by, it’s very easy to forget to review certain documents to check they are still relevant.

Periodically we remind clients to open that drawer in their filing cabinet to check that items such as Wills, Lasting Powers of Attorney and Pension Nomination forms are all still up to date and relevant.

It’s easy to forget that everyone gets older and from time to time checking who your Executors are in a Will and considering whether they are still in a position to act for you is important…….. Not to mention that new members of a family are accounted for in wishes contained in Wills.

Just to have that recap and conversations is healthy and to make sure that those who need to know are aware of where to find documents and who to contact.

There are certain life events that make it even more important to amend these documents, especially if something happens to those mentioned in your Will. It is also worth remembering that on marriage (or divorce) Wills are automatically revoked meaning the laws of intestacy become applicable which more often than not are unsuitable.

These documents are even more important with blended families or couples who are setting up home together or starting a family without being married. Considering that under intestacy rules your children would inherit rather than your partner can be a bit of a wake up call!

A lot of people think that a Will is only important when you become ‘old’ but in reality as soon as you have assets and/or dependents then one should be in place, no matter how simple it is.

Basic Mirror Wills are so easy to put in place, they generally take no longer than a couple of weeks from the application to signing the final legal document. They are also relatively inexpensive, priceless when you consider that not only will you have peace of mind if the worst happens, but, that your family and loved ones are taken care of.

Death and ill health are not something anyone really wants to think about, however, planning for the future is necessary. Once you have the plans in place, ensuring that the documents are still relevant to your current circumstances is important. Set a calendar reminder every few years to have a glance over your plans and remember to update them if anything significant occurs.

If you would like any advice on creating or updating your Wills or LPAs, please do not hesitate to contact us.

If you would like help in any other aspect of your Estate Planning then please do get in touch

The importance of Digital Data and ensuring it is never lost

Wed, 07 Jun 2023 09:25:22 GMT

Technology is key in both our personal and professional lives and it is here to stay. We now have so much information available at our fingertips we have completely changed how we live, work, and interact.

Several companies are now putting measures in place to make sure your digital data is never lost. It can be tracked to maintain the flow of information and maximise efficiency.

From a social / sentimental aspect, think of all the photographs you have stored to the cloud instead of printing, all the memories diarised on Facebook, all the blogs you have written about your adventures. If you are no longer here, having a legacy contact will ensure your memories live on, and how beautiful those pictures and memories will be for your loved ones.

Please click here for more information from Step.org on protecting your digital assets.

Preservation (or deletion) of your account is possible but there are different processes to follow depending on the platform you use. Below you will find information on how to set up legacy contacts to ensure your digital history is processed as per your wishes and that what you would like your loved ones to have access to, is accessible when they need it most.

Apple

Following this guide should take minutes and it will mean that your legacy contact has access to all of your iCloud data should the worst happen. You have the option of sharing your access key, or printing a copy of your QR Access Code. Without a legacy contact, the data would be erased after a certain amount of time has passed or your family would need to obtain a court order if they wish to access your account.

Please click here for the guide.

Google

Google has a Google Inactive Account Manager option to give your legacy contact access to your data and you can decide what they have access to.

Please click here for the guide.

Facebook

Appointing a legacy contact will enable them to manage and organise your memorialised account. They can also create a section that allows people to share comments and pictures in tribute.

Please click here for the guide.

Alternatively, you can leave the information with all your accounts, usernames and passwords with someone trusted which is useful for platforms such as Microsoft that do not have legacy plans in places and auto delete data after two years.

Technology companies may well update their terms and conditions for these over time so it is just as important to make sure you are up to date with their requirements as it is to ensure you have an up to date contact.

Sources: https://themyouandme.com/blog/top-5-reasons-why-technology-is-important-in-business/#:~:text=It%20helps%20track%20and%20streamline,the%20business%20to%20grow%20rapidly .

https://memories.step.org/update-your-legacy-settings/

https://step.org/digital-assets

Practitioner Shares Top Tips for Ensuring Clients' Digital Identities Never Die, The Will Company, newsletter, 19.05.2023

https://www.theguardian.com/society/2022/apr/04/upon-my-death-delete-how-to-plan-your-digital-legacy

If you would like help in any other aspect of your Estate Planning then please do get in touch

ESG Investments

Thu, 11 May 2023 12:50:02 GMT

Environmental Social and Governance in the investment world is continuing to pick up pace with more investors being interested in portfolios in this area as an alternative to ‘mainstream’ portfolios.

But what does it mean?

Environmental

This may include companies carbon footprint, waste, treatment of animals, pollution and so on.

A company may use a lot of energy or create pollution but offset this with green initiatives in the workplace.

Social

This considers the companies interaction with the wider world. How it interacts with internal and external stakeholders for example.

Does it support initiatives in the local community? Does it source its materials from companies with similar core environmental values (eg fair trade suppliers)? Does it take Health & Safety issues seriously as well as their employees wellbeing? Is the workplace well diversified and inclusive of all genders, races and have appropriate ways of dealing with any discrimination?

Governance

These standards ensure that the company uses transparent and accurate accounting methods, that board members are diversified and appropriately selected.

They would also not use political contributions to benefit from preferential treatment.

The Impact on Investors

By following ESG investments, it naturally cuts out some large companies that may have exposure to tobacco production, firearms or agricultural biotechnology. It would also exclude companies who have recently had major controversies in animal welfare, governance issues or product safety.

This ‘screening’ is time consuming and therefore costly. As a result, ESG investments are normally slightly more expensive than main stream investments that do not go through the same selection criteria.

As a result of excluding certain companies (or even industries), performance could be affected as some of the non ESG companies may still perform well in the market place.

With this in mind, at Belmore we do offer access to ESG portfolios for those clients who specifically wish to follow this type of investment. If you would like to find out more about these and other types of investments then please do get in touch

Variable Savings Rates

Tue, 28 Mar 2023 07:51:06 GMT

It is no secret that I am new to this side of the Finance Industry and like any dedicated new employee, I have been throwing myself in to researching and absorbing as much information as I can.

Some of the information I have come across has shocked me somewhat, so I decided to write this blog to pass this on to you.

The Background

A couple of weeks ago HSBC, Barclays, Santander, Lloyds Banking Group (including Lloyds Bank, Halifax, and RBS), and Natwest Group (including Natwest and RBS) reported an extra £7billion by increasing net interest margins last year. They passed on higher rates to borrowers but not to savers. That is an average of every person in the UK paying them £106.

The Bank of England base rate rose in just over a year from 0.1% to 4.25%. This should have given a boost to savers. Instead, customers of Sainsbury’s Bank for example, even when saving into a VARIABLE ISA, the rate is not increased unless it is specifically requested by the saver. How can they get away with this I hear you cry! Well, it is all in black and white in the terms and conditions.

What This Means........

........ in real terms is that anyone who opened an account pre-April 22 is on a rate of 0.7% regardless of a higher rate of 2.85% being offered to entice new customers. So, on savings of £10,000, instead of paying out £285, they are paying just £70.

Some banks it would seem have not raised rates at all on a vast array of products.

The most common savings accounts in the UK are the easy access savings accounts. These let customers deposit and withdraw money easily for low levels of interest in comparison to other fixed rate accounts. When the base rate went up, the interest paid on these easy access savings accounts stayed the same.

Santander advertised an Esaver account in July 22 at 0.75%, in November 22 (just 16 weeks later) a new Esaver account was launched at 1.5% but the boost was not passed on to the earlier account holders.

They are not alone in this; Virgin money have left customers of its Defined Access Esaver Accounts on 0.25% whilst offering new customers 2.25%.

AA and Allied Irish Banks still only pay 0.01% on some accounts!

The Tesco Internet Saver has a rate of 2.9% with a bonus of 2.2 percentage points for a year at the moment but given they have offered seventeen different bonus rates in the last year between 0.4 points and 2.2 points, customers may have missed out by not opening the account a week or two later!

Natwest, Barclays, HSBC and Lloyds were asked to explain the delay in increasing savings rates compared to the speed at which they increase mortgage and loan costs to MPs of the Treasury Select Committee. The ever-widening gap in what they charge borrowers and pay savers rose between 13% and 23% percent last year alone. This all adds up the £7billion in profits I mentioned earlier. Their explanation, savers do not want better easy access rates, they want better regular saver rates.

Regular saver accounts pay out interest in exchange for cash being paid in instalments. However, if cash is taken out before the term ends (usually 12 months) the interest rate they pay will be slashed.

A poll run by This is Money showed that 94% of their readers directly disagreed with what the banks had said. They wanted better easy access rates. Only 6% of their readers wanted better regular savings deals.

How much cash should I have?

In my new role, I am also learning that the split a client has between cash and investments is very important to ensure there is enough for short term emergencies and at the same time the potential for longer term growth.

Sources: https://www.msn.com/en-gb/money/other/do-big-banks-take-us-for-fools-they-rake-in-huge-sums-on-low-savings-rates-and-costly-mortgages-so-it-s-time-savers-ditched-them-says-sam-barker/ar-AA182ulQ?ocid=finance-verthp-feeds&cvid=1b873b38fd0948af8227a4f9cdf1878a&ei=32

https://www.msn.com/en-gb/money/other/the-bank-that-won-t-pass-on-rate-rises-unless-you-ring-and-ask-just-one-of-the-ruses-greedy-lenders-use-to-squeeze-savers-and-pump-up-profits/ar-AA183rQK?ocid=finance-verthp-feeds&cvid=1b873b38fd0948af8227a4f9cdf1878a&ei=31

If you are not sure whether you have this split right then please contact Belmore and one of our advisers will be happy to help - get in touch

Pension Changes in the Budget

Mon, 20 Mar 2023 11:18:17 GMT

As many of you will have heard, one of the ‘surprises’ in the budget were the changes being made to pensions.

A few days prior, there had been speculation that the lifetime allowance was going to rise but it went further and has been abolished. There has also been a rise in the annual allowance and some less headline grabbing but equally as important changes.

Annual Allowance

From 6th April 2023 this is going to increase from £40,000 to £60,000. The existing rules apply to this in that if it is an employer contribution it has to pass the 'wholly and exclusive' test or if a personal contribution then it is a maximum of 100% of salary or £60,000 whichever is lower.

Taper Allowance

The minimum tapered allowance has been increased from £4,000 to £10,000. Additionally, from 6th April 2023 the ‘adjusted income’ amount at which the tapering starts will also increase from £240,000 to £260,000.

This means that anyone with an adjusted income of over £260,000 will have their annual allowance reduced by £1 for every £2 they are over the threshold until their annual allowance reaches £10,000.

Money Purchase Annual Allowance

If an individual has already started to take income from a pension, they are subject to the Money Purchase Annual Allowance rather than the Annual Allowance.

For the tax year 2023 to 2024 onwards, the money purchase annual allowance limit will increase from £4,000 to £10,000.

Lifetime Allowance

The lifetime allowance charge is to be removed from 6th April 2023. The lifetime allowance itself is to be fully abolished from the 2024 to 2025 tax year, through a future Finance Bill.

Members who hold a valid enhanced protection or any valid fixed protections, where this protection was applied for before 15 March 2023, and a certificate or reference number subsequently issued, from 6 April 2023 will be able to accrue new pension benefits, join new arrangements or transfer without losing this protection.

There is some 'devil in the detail' that has emerged in that when you come to take benefits the 25% tax free cash is to have a ceiling which is initially going to be set at 25% of the current lifetime allowance (so £268,275). Anybody with existing enhanced or valid fixed protections will retain their higher entitlement to tax free cash.

Where the following payments would currently be subject to an lifetime allowance charge at 55%, from 6 April 2023 they will be taxed at the recipient’s marginal rate:

Serious Ill-Health Lump Sum
Uncrystallised Funds Lump Sum Death Benefit
Defined Benefits Lump Sum Death Benefit
Lifetime Allowance Excess Lump Sum

All in all there's quite a lot to digest in these changes. If you would like any advice surrounding this or any other area to do with pension planning then please do get in touch

State Pension Top-ups

Wed, 15 Feb 2023 18:15:33 GMT

As well as there being cuts to Capital Gains Tax and the freezing of other allowances such as Inheritance Tax and ISAs, there is a little stealth item that is falling under some people’s radar - State Pension Top Ups.

Everyone under State Retirement Age is able to check their entitlement using the government website

https://www.gov.uk/check-state-pension

To have the maximum number of years entitlement you need to have built up 30 years worth of credits which are normally from paying National Insurance contributions or getting NI credits.

For all sorts of reasons people do not have the full number of years credit and a forecast will highlight whether this is the case.

The Changes.......

Until 5th April 2023, you can pay to fill any gaps in your NI record for the last 16 years. From 6th April this will reduce to 6 years.

Once a NI gap falls outside of the period it is not possible to buy those years back.

Action to be taken.........

We are therefore encouraging everyone to check their State Pension forecasts asap so that calculations can be done as to whether it is worthwhile buying the years back. Time is running out so please act promptly if you are concerned.

If you would like any advice surrounding this or any other area to do with pension planning then please do get in touch

The Benefits of Pension Contributions

Thu, 19 Jan 2023 12:12:36 GMT

With everyone scrambling around to complete their 2021/22 tax returns it is easy to forget that the end of the 2022/23 tax year is fast approaching.

Each year we remind clients of the usefulness of making the most of allowances available whether it be ISAs or Pension Contributions.

In this article, we focus on the Pension Contribution side.

The scenario.......

If you have a family, with children of school age, and are a higher rate tax payer (in this example earning £75,000) then there is more than one benefit of making pension contributions.

For the sake of simplicity let’s assume that you have made no pension contributions for the current tax year and a contribution of £25,000 is affordable.

By making a personal pension contribution of £25,000 net it automatically gets basic rate tax relief of 20% as soon as the investment is made (making a gross contribution of £31,250).

On your 2022/23 tax return the pension contribution would be recorded which effectively increases your higher rate tax band by £25,000 meaning that you gain a further 20% tax saving on this contribution by paying basic (20%) rather than higher (40%) tax on this income. This results in £4,946 of tax saving.

Meantime, in the office.........

.......At Belmore, we have had a year of positive achievements within the company. Jemma successfully completed her Diploma level qualifications in the summer and more recently Laura has become an already valuable member of the team.

Our first year as Belmore has flown by and we are always grateful for the ongoing support, referrals and lovely messages we get from our clients.

Looking forward to 2023 Belmore continues to look to grow as Claire has more capacity to for new clients and helping them fullfil their future objectives. If you know someone that may be looking for help as they have reached a transition period in their lives them please put them in touch. Existing clients will start to meet Jemma in person as she begins to gain experience in face to face meetings alongside either Jonathan or Claire. We are sure that Laura will continue her steep learning curve about the industry and will become a more familiar voice on the phone to everyone.

As we do each year, the office will be closed from end of business on Friday 23rd December at midday and be reopening on Tuesday 3rd January 2023.

We would like to take this opportunity to wish all our clients and connections a very Merry Christmas and Prosperous New Year.

If you'd like to discuss your investments further

then please do get in touch

As another year draws to an end

Tue, 20 Dec 2022 11:46:56 GMT

As many people do at this time of year, at Belmore we have taken a moment to look back over 2022.

Sometimes it’s a good job that none of us have a crystal ball with some of the political and worldwide turmoil there has been, some of which no one could have predicted!

Going into 2023 .......

......and another recent interest rate rise, it is fairly clear that markets are still feeling the effects of the now infamous mini budget/u-turn/quickest turnaround of PM in history, however some of the predictions by market forecasters are beginning to look a little better than they were.

Meantime, in the office.........

Our first year as Belmore has flown by and we are always grateful for the ongoing support, referrals and lovely messages we get from our clients.

As we do each year, the office will be closed from end of business on Friday 23rd December at midday and be reopening on Tuesday 3rd January 2023.

We would like to take this opportunity to wish all our clients and connections a very Merry Christmas and Prosperous New Year.

If you'd like to discuss your investments further

then please do get in touch

It's all a bit taxing......

Thu, 01 Dec 2022 10:43:09 GMT

Now the dust has settled from the recent mini-budget, some of the tax changes are going to be important and relevant to investors

Capital gains tax

What has changed?

The chancellor announced that the annual CGT exemption will be cut by over half from £12,300 in the current tax year to £6,000 in 2023/24 and £3,000 in 2024/25. Any profits (‘gains’) that exceed the exemption will be taxed at the existing rates of 20% for higher and additional rate taxpayers and 10% for some basic-rate taxpayers (28% or 18% on gains from residential property).

In practice……

This means for a higher rate taxpayer making a gain in each tax year the position would be as follows:

It is worth noting that Trusts currently have half of the CGT allowance for individuals so the new rates for them will now be £3,000 for 2023/24 and £1,500 for 2024/25.

There are several ways to mitigate CGT, including investing in an ISA, making the most of the CGT exemption each tax year, and using losses to reduce your gain.

Dividend tax

What has changed?

The annual dividend allowance – the amount of dividend income you do not have to pay tax on – will fall from £2,000 in the current tax year to £1,000 in 2023/24 and £500 in 2024/25.

The rate of dividend tax will remain at 8.75% for basic-rate taxpayers, 33.75% for higher-rate taxpayers and 39.35% for additional rate taxpayers.

What does it mean for investors?

This means for a higher rate taxpayer receiving a dividend in each tax year the position would be as follows:

Income tax thresholds

What has changed?

The additional-rate income tax threshold will be lowered from £150,000 to £125,140 from April 2023.

The personal allowance (the amount you can earn each year before you start paying income tax) and the higher-rate income tax threshold have been frozen at their 2021/22 levels of £12,570 and £50,270, respectively, for an additional two years until 2028.

Over a nine-year period from 2019/20, the personal allowance and higher-rate tax thresholds will have risen by just £70 and £270, respectively.

What does it mean for investors?

Lowering the additional-rate income tax threshold will result in more people paying the 45% top rate of income tax. Someone earning £150,000 could face an income tax bill of £53,703 in 2023/24, up from £52,460 currently.

Meanwhile, freezing the personal allowance and higher-rate tax threshold could see more people drifting into higher tax bands because of inflation. An individual who earned £50,000 in 2021, and whose income rises in line with actual and forecast consumer price index (CPI) inflation, could see their income tax bill rise from £7,486 to £15,825 by 2028.

One way to potentially reduce your income tax bill is to save into a pension. If your salary and/or bonus means you cross into a higher tax band, making a personal pension contribution could mean your adjusted net income falls below the threshold and potentially avoids higher or additional rate tax.

Inheritance tax nil-rate band

What has changed?

The IHT nil-rate band and residence nil-rate band have also been frozen for another two years until 2028. The IHT nil-rate band has remained at £325,000 since 2009. Over this period, the average UK house price has surged by 77% from £154,006 to £273,135 in 2022, according to Nationwide.

By 2028, families will have missed out on almost 20 years of inflation-linked increases. The residence nil-rate band – an additional allowance for those who pass on their main residence to children or grandchildren when they die – was last increased in April 2020 to its current level of £175,000.

What does it mean for investors?

Freezing the thresholds could result in more families being caught in the IHT net. In the last decade alone, IHT receipts have rocketed from £2.9bn in 2011/12 to £6.1bn in 2021/22.

With all of these changes, a little planning will go a long way - it is important that actions are taken now to make the most of the current allowances before they change and plan to make the most of future opportunities to reduce tax payable.

If you'd like to discuss your investments further

then please do get in touch

Turbulent Markets

Tue, 25 Oct 2022 09:44:22 GMT

As you can imagine, we receive numerous updates from all sorts of investment experts about what is occurring in the markets. I think we can safely say that everyone is in agreement that the last few weeks have been something of a turbulent market.

However, all is not lost - and at the risk of sounding like a stuck record, we came across these statistics recently which show when the S&P 500 has fallen by more than 25% since 1950, what has happened over the subsequent periods. It shows that riding the rollercoaster in most instances leads to growth in the markets within a year and certainly considerable growth in the medium to long term.

This is backed up by the performance of clients' portfolios that we are seeing when looking at historic data.

I hear you think ‘but that’s the American markets’........

So let us look at the FTSE 100 index. At the time of writing this article, it is sitting fractionally shy of 7,000. Putting it into perspective over the last 5 years…….

Yes, it has been higher, but compared to the effect of Covid-19 and the following 12 months, markets are still holding. Although the ‘feeling’ at the moment is that markets are in turmoil, in fact, it isn’t as bad as the media would like you to believe.

So what about portfolio performance?........

The biggest impact we have seen on clients’ portfolios is the combination of the downturn in the stock markets of recent coupled with the falling Bond markets following the now infamous mini-budget of a few weeks ago.

This doesn’t happen very often as normally these are not correlated.

The bond markets are starting to recover slightly but it will take a little time for there to be confidence in the government again and a lot of this will be what happens in the coming weeks as the new Prime Minister settles in.

Whilst we cannot be exact about when a recovery will happen, needless to say, that history shows it will……….. So sit tight and hold on!

If you'd like to discuss your investments further

then please do get in touch

What a week!.......

Tue, 04 Oct 2022 14:01:09 GMT

Following Monday morning's announcement of the ‘U turn’ of the abolishing of the 45% income tax bracket, the markets are still adjusting to the news.

The impact of the original government announcement of all the tax changes was certainly felt across the markets.

But why was this the case?..........

And round the circle we go again!

The message we continue to share with clients is to sit tight and do nothing - this is a continual cycle that is periodically repeated over history for various reasons…….. Looking at the facts rather than the emotions will lead people to understand that it is a cycle that will play out at some stage and market returns will grow again.

If you'd like to discuss your investments further

then please do get in touch

Interest Rate Rises

Fri, 05 Aug 2022 11:18:24 GMT

It’s not news to anyone that interest rates are gradually creeping up, albeit a small step at a time. Depending on who’s articles you read, predictions as to how high they get vary but everyone seems to agree that they will continue to increase for the rest of this year at least.

With this in mind, it is important to remember the basic rules to make sure you make the most or are impacted the least as a result of these rises.

Clear off any credit card debts each month to avoid costly interest payments (we’ve seen some recently at over 30% APR)
If you have or know of someone who has multiple credit card debts then look at consolidating them on some 0% transfer deals
Keep an eye on when your mortgage fixed rate is due to expire or if you are on a standard variable rate look to see if this still suits you as an individual or whether it is time to jump on a fixed rate
Keep an eye on cash savings rates - they are beginning to creep up. Everyone needs some cash as an ‘emergency fund’ but there’s no reason why it can’t be in an account earning some interest
Remember your interest limits (£1,000 for basic rate taxpayers and £500 for higher rate taxpayers) before tax has to be declared and paid - be aware of whether you need to submit a tax return
Now may be a good time to review the split of cash within the household to ensure the interest limits are kept within where possible - why pay tax when you perhaps don’t have to?

At Belmore, we work closely with mortgage brokers so if anyone would like us to refer you then please do let us know.

For cash accounts, we recommend Insignis in some cases it takes a lot of the administration hassle out of changing savings accounts and has access to a wide range of instant access, term and notice accounts.

Whilst most of the media will give the ‘doom and gloom’ view of interest rates rising, there are always some winners too!

If you'd like to discuss your investments further

then please do get in touch

Where were you 25 years ago?

Thu, 09 Jun 2022 10:51:33 GMT

With the long platinum jubilee bank holiday behind us, a lot of people have spent the last few days reminiscing about events that have happened in the past.

When all the coverage was on the television and the historic films being shown, I suspect a lot of people would have put the current day ‘big news’ out of their minds and instead replaced it with thoughts of ‘that was life before mobile phones’ or reminiscing about what they were doing when certain events happened, be it the first time the worldwide web was used or the first email being sent. Little did we know how these would change the modern business world!

For example, back in 1997…….

J.K. Rowling just published the first Harry Potter book.
General Motors is releasing the EV1, an electric car with a range of 60 miles.
The internet is in its infancy, Y2K looms, and everyone is worried about the Russian financial crisis.

A stranger offers to tell you what’s going to happen over the course of the next 25 years.

Here’s the big question: Would you invest in the stock market knowing the following

events were going to happen? And could you stay invested?

Asian contagion
Russian default
Tech collapse
9/11
Stocks’ “lost decade”
Great Recession
Global pandemic
Second Russian default

With everything I just mentioned, what would you have done? Gotten into the market?

Gotten out? Increased your equity holdings? Decreased them?

Well, let’s look at what happened........

From January 1997 to December 2021, the US stock market returned, on average, 9.8% a year.

A dollar invested at the beginning of the period would be worth about $10.25 at the end of the period.

These returns are very much in line with what returns have been over the history of the stock market. How can that be? The market is doing its job. It’s science.

Market uncertainty

Investing in markets is uncertain. The role of markets is to price in that uncertainty. There were a lot of negative surprises over the past 25 years, but there were a lot of positive ones as well. The net result was a stock market return that seems very reasonable, even generous. It’s a tribute to human ingenuity that when negative forces pop up, people and companies respond and mobilise to get things back on track.

Human ingenuity created incredible innovations over the past 25 years. Plenty of things went wrong, but plenty of things went right. There’s always opportunity out there. Think about how different life is from the way it was in 1999: the way we work, the way we communicate, the way we live. For example, the gross domestic product of the US in 1997 was $8.6 trillion and grew to $23 trillion in 2021. (Read more about the merits of investing in innovation.)

In 1997, few would have forecast a nearly 10% average return for the stock market. But that remarkable return was available to anyone who could open an investment account, buy a broad-market portfolio, and let the market do its job.

Investing in the stock market is always uncertain. Uncertainty never goes away. If it did, there wouldn’t be a stock market. It’s because of uncertainty that we have a positive premium when investing in stocks vs. relatively riskless assets. Reaping the benefits of the stock market requires being a long-term investor.

By investing in a market portfolio, you’re not trying to figure out which stocks are going to thrive, and which aren’t going to be able to recover. You’re betting on human ingenuity to solve problems.

The pandemic was a big blow to the economy. But people, companies, and markets adapt. That’s my worldview. Whatever the next blow we face, I have faith that we will meet the challenge in ways we can’t forecast.

I would never try to predict what might happen in the next 25 years. But I do believe the best investment strategy going forward is to keep in mind the lesson learned from that stranger back in 1997: As they always said on “Dad’s Army - Don’t panic Mr Mainwaring!” https://www.youtube.com/watch?v=nR0lOtdvqyg

Invest for the long term.

Source: Dimensional

If you'd like to discuss your investments further

then please do get in touch

Fraud and Scams

Mon, 23 May 2022 10:34:35 GMT

In recent months we’ve been aware of an increasing number of identity fraud and scam cases of clients at Belmore.

This can be a very upsetting and unnerving experience for those targeted and lead to much distress, both emotionally and potentially financially.

Things to look out for…..

Naturally, we want to help protect our clients as much as possible from this sort of experience and therefore would remind you of some key points to bear in mind

If you are called by your Bank they will never mind you calling them back to make sure it is a genuine call - phone the number from a website or your bank card, not a number they give you
You will never be asked by a Bank to confirm your entire account details over the phone, only certain digits or a security password
If you receive a text message from any business with a link then always be wary of what you are clicking on
If you receive post from a bank or financial institution that you do not recognise then contact them immediately in case an account has been opened in your name that you are not aware of
If you are paying for goods or services online then make sure it's on a secure connection to reduce the risk of those details being cloned
Regularly change passwords and PINs on accounts
Shred any confidential information
Watch out for unusual transactions on bank statements
Be wary of what you post on social media that might give away sensitive information that fraudsters could use
Be aware of the latest scams, be it Covid test kits or post office delivery charges, the criminals will always be changing the ways they scam people

Above all, if you have any doubts then pick up the phone and check - if the company is genuine no one will mind a call to make sure.

If you are on the receiving end of any type of identity theft or scam then please do let us know so we can take any steps needed.

What are Belmore doing to help?

If you'd like to discuss your investments further

then please do get in touch

Student Loans

Fri, 06 May 2022 05:42:49 GMT

As the summer approaches, many people will be considering whether or not they wish to attend University and unsurprisingly a large factor in this decision can be the finances.

Many of our clients’ automatic reactions to their child or grandchild’s university years are to pay the costs associated but is this the right thing to do?

It is ingrained into most people that debt is not a good thing but if there is money to help the student then is paying their student loan (or them not having it in the first place) the right thing to do?

How do Student Loans work?

Once the student leaves university, as long as they haven't taken out a postgraduate loan to complete a master's, they only repay their undergraduate student loan when they earn above £2,274 a month (equivalent to £27,295/year) and then it's fixed at 9% of everything you earn above that.

To give some examples…….

If they earn £28,000 in a year, what do you repay?
The answer is £63.45, as £28,000 is £705 above the threshold and 9% of £705 is £63.45.
And if they earn £35,000, what do you repay?
The answer is £793.45. £35,000 is £7,705 above the threshold and 9% of that is £693.45.

Many people earning over the £27,295/year threshold (2022/23) will never pay back their student debt within 30 years. And lower earners won't repay very much at all.

They stop owing either when they've cleared the debt, or when 30 years (from the April after graduation) have passed, whichever comes first. If they never get a job earning over the threshold, it means they won't have repaid a penny.

So what about the interest?

The interest is as follows:

While studying:
Accrues RPI inflation plus 3% on the outstanding balance. This continues until the first April after graduation when it changes to...
After studying, earning under £27,295/year (2022/23):
Accrues RPI inflation.
After studying, earning £27,295 - £49,130/year (2022/23):
The interest rate will gradually rise from RPI to RPI plus 3% the more you earn (the interest rises 0.00015% for every extra pound you earn or, put another way, if you earn £1,000 more, you accrue 0.15% extra interest).
After studying, earning over £49,130/year (2022/23):
Accrues RPI inflation plus 3%.

So what is the right thing to do?

Many people will still want to help the student financially and it comes down to personal choice.

However, by taking a step back and considering the options, any parents or grandparents wishing to financially support their children/grandchildren may like to look at other options so the student takes out the loans and repays them as above but instead invests in vehicles such as LISAs or ISAs to help them save towards life post-university and buying a property (remembering of course that the value of investments can go down as well as up).

It could cost a graduated student a lot more to rent (rather than buy) a property than it would to pay back a student loan…………..

* All facts and figures provided by MSE

If you'd like to discuss your investments further

then please do get in touch

World Events and the Markets

Wed, 16 Feb 2022 12:46:09 GMT

According to reports last weekend, Russia may invade Ukraine as early as today (Wednesday 16 February). These reports have, without a doubt, caused the world to go into panic mode and stirred a new sense of turbulence in the financial markets. The question on everyone’s mind is what do we stand to do to protect our financial position? The short answer… DO NOTHING! – but let’s elaborate and back that up.

What’s the next move?

When it comes to the latest Ukraine-Russia tensions, only Vladimir Putin can predict the Kremlin’s next move with a degree of certainty. In fact, the world is still scrambling to uncover Putin’s motives for this colossal military build-up. While the western world is cycling through every combination of threats to deter the Russians from attacking, it seems like their ability to affect the Kremlin’s immediate actions are limited.

There is no doubt that a Russian invasion of Ukraine will spook global financial markets and oil prices. This is evident in how the global stock markets tumbled deep into the red on Monday as oil prices rocketed amid concerns about a possible Russian invasion.

This is not the first time Russia is stirring panic in the markets. In 2014, Russia’s invasion and annexation of Ukraine’s Crimea sent shockwaves through global markets, but as always, with geopolitical flare-ups, the volatility was quickly subdued. That's not to suggest that the threat of 2014 was in any way similar to what we are currently seeing, with over 130,000 Russian troops staged just outside the border of Ukraine. However, the reality is that the accompanying market turbulence in the capital markets is nothing new.

The following chart visually illustrates the past ten decades of bull and bear markets, a time filled with wars, financial crises, terrorist attacks and a global health pandemic, all of which caused significant market disruptions that led to economic bear markets. It is impossible to predict the next bear market or its severity with precision. Still, one can be confident that after every bear market, there will be a bull market where the capital markets around the world will resume their permanent advance.

With the above said, it is no wonder why investors go into panic every time they hear fear-filled words like “market-crash”, “sell-off”, and “stocks tumbling”. I, too, would be much more comfortable if the media would instead start using words like a “temporary market decline” or a “marginal decrease in asset prices”. However, irrespective of the fear and negative sentiment prevailing in the public markets, this is not a good time to change your investment strategy.

Fleeing the market in times of a downturn could result in you missing out on some significant gains when the markets recover. This can have a considerable impact on your long-term performance.

An analysis by JP Morgan concluded that if you were not invested in the market for just 10 of the 7,301 days between 4 January 1999 and 31 December 2018, your annualised return went from 5.62% per year to 2.01% per year. To sketch an even more frightening scenario, if you missed the best 60 days of market performance, you would have realised a negative return of 7.4% on your investment. *

What is even more eye-opening to JP Morgan’s study is that six of the best performing days in the market occurred within two weeks of the worst days. Therefore, we strongly emphasise not to try and time the market.

Given the above evidence, our advice would always be to have confidence in our investment philosophy. Trust the markets, resist a sell-off, diversify your risks and focus on the long-term. Or in more simple terms… DO NOTHING!

* All facts and figures provided by Betafolio

If you'd like to discuss your investments further

then please do get in touch

Sit Tight and Stay with the Plan

Mon, 24 Jan 2022 16:23:48 GMT

Since the new year, we have seen a bit of a bumpy ride in the markets so it seemed a good time to remind people to remain with the long term plan which is to sit tight and stay with the plan.

We all know that investing in markets involves taking risks and the amount of equities and non-equities a client has is the most important fundamental to ensure they are happy with the ‘downs’ as well as the ‘ups’.

We’re all humans so trying to exclude any emotion from the markets going down (or up) is easier said than done.

What’s causing the current market uncertainty?

There are many variables influencing the market movements at the moment, not least inflation and of course Covid-19 continues to disrupt worldwide economies. The situation in the Ukraine is another uncertainty but is just an event which we have seen before. All of these unpredictable events cause market fluctuations, but over the long term have very little impact just like the recent Covid-19 impact in March 2020. The distribution of vaccines and the easing of lockdowns were followed by an economic rebound, but the emergence of new variants would be a setback for the recovery. Despite these challenges, the economy recovered and by August surpassed its pre-pandemic peak.

This is a good reminder of the power of markets. Investors can’t predict the nature or timing of the next crisis, or the end of any existing ones. But markets are forward-looking and reflect optimism. New challenges will await, but rather than guessing at what will happen, investors can choose to trust markets and their long-term prospects. The year 2021 was one that emphasized the benefits of discipline and diversification, of planning and perseverance, in a market that was uncertain (like markets in all the years before it). As we enter 2022, looking backward can help as investors look to the future.

Our previous article at the end of the last year touched on the hidden risk of inflation and whilst, at times like these, it might feel safer to stay in cash, the current rate of inflation is reducing the actual value of this option.

All of our clients have well thought out financial plans, have their attitude to risk taken into account when selecting suitable portfolios and are aware of the potential risks in their investments.

If you'd like to discuss your investments further

then please do get in touch

Tax Year End planning - don't leave it until the last minute...........

Thu, 06 Jan 2022 06:34:05 GMT

A bit like Christmas, there are certain things in the financial calendar that come around on the same dates every year whether we like it or not.

If you go past an accountant's office right now, the chances are that you will find them scratching their heads trying to collate information as they are in their ‘rush’ to get clients tax returns done by 31st January deadline.

We often find ourselves wondering why human nature gives a tendency to leave everything to the last minute, whether it be Christmas shopping on Christmas Eve or scrambling around to get the right information before tax deadlines.

The Tax Year End date never changes......

So with this in mind, a timely reminder to all that the end of the tax year is 5th April……….this should come as no surprise, but I can bet that someone somewhere will leave it to that first week in April to make a pension or ISA contribution to utilise allowances.

A little reminder of what you may like to do before 5th April

So here’s a bit of a checklist to try and avoid any ‘surprises’ - have you…….

Used your ISA allowances?
Used your Capital Gains Tax allowances?
Made sufficient personal pension contributions to offset any higher rate tax?
Moved a married couple's personal allowance to a spouse to increase their personal allowance?
Made any company pension contributions if the company year end coincides with the tax year end?
Used your personal income tax allowance?
Ensured other members of the family have used their JISA/LISA allowances?
Made pension contributions even if you’re a non taxpayer?
Made good use of your annual gifting allowances?

Not all of those will be relevant to everyone but there’s a good chance one or two are.

If anything in the list is ringing bells and you’d like to beat the rush then please do then get in touch to discuss what actions are needed

Inflation - Does it Matter?

Tue, 16 Nov 2021 15:56:48 GMT

There has been a lot of media coverage recently around inflation rising over the last few months.

Whilst some inflation is good, too high inflation can indicate that the economy is running into problems with demand outstriping supply - something that is certainly being seen in certain industries such as chips available for new cars and building materials for developers.

What if inflation rises too quickly?

If inflation rises too quickly, there’s a good chance that interest rates will rise, having an impact on people’s disposable income. With the bank base interest rates having been just 0.1% since March 2020 there would be little surprise if rates were to rise slightly in the coming months.

The 'hidden' risk

With inflation around 2.5% and the bank base rate at 0.1% it is no surprise that the ‘real’ value of cash savings is decreasing leading more people to look at investing some of their cash reserves rather than keeping them at the bank.

Inflation is a ‘hidden risk’ that often people forget about - the risk of doing nothing or having too much wealth sitting in cash can erode the real value of your assets. Effectively any return of less than inflation is depleting your purchasing power in the future and therefore your overall wealth.

If you are thinking of reducing your cash balance to protect against inflation then get in touch to discuss whether it is suitable for you

Gifts out of excess income

Tue, 12 Oct 2021 10:10:01 GMT

Often during meetings, we find ourselves telling clients they can afford to spend more money as the value of their wealth is increasing beyond both their needs and the inheritance tax band thresholds.

When discussing the topic of ‘gifting’ money, people often think this is limited by the £3,000 per year gift rule or have concerns around the ‘will I live for more than 7 years’ conundrum.

Finding a solution

One solution which gives clients pleasure is to make ‘gifts out of excess income’. This is where they do not spend all of their income and instead can gift it to whomever they wish.

This can be such things as paying towards grandchildren’s nursery or schooling costs, through to helping out a friend who is struggling to meet their outgoings.

So long as it can be seen that the money is from excess income then it does not count towards the annual gift allowances or start the 7-year ‘clock’ ticking.

Review your cashflows

By reviewing clients’ lifetime cash flows it can often show whether this form of gifting is possible without causing detriment to the long-term plan.

If you’d like to review your financial plan to see if this is an option for you or you have any questions regarding how gifts out of excess income works then please get in touch .

How to help the next generation - LISAs

Tue, 28 Sep 2021 12:01:41 GMT

One of the common discussion points in meetings with clients is how best to help the next generation get on the property ladder.

With property prices outgrowing salaries, more people are struggling to get on the property ladder and the main hindrance is having a suitably sized deposit. The average age for someone to buy their first home is currently 31.

A Lifetime ISA (LISA) is a good way to help someone save for a deposit.

Why choose a LISA?

Many of us are used to the concept of an ISA and we are aware of the annual allowance (currently £20,000). A LISA is a variation on the theme of this and allows individuals between the ages of 18 and 40 to save up to £4,000 each tax year.

The attractiveness of a LISA is that the government adds 25% of the amount invested (meaning a maximum of £1,000 added per tax year). The only proviso for this bonus is that the fund is used to purchase a first property or used in retirement.

LISAs can be either held in cash or invested in equity portfolios.

If you’d like more information regarding LISAs and how they could fit into your personal situation then please do not hesitate to give us a call.

Pension contributions for higher rate taxpayers

Sun, 22 Aug 2021 12:15:41 GMT

Most people are familiar with the fact that you can make personal contributions to your pension. These contributions will automatically receive 20% tax relief.

Therefore, making a contribution of £500 will result in £625 being invested in your pension.

For a higher rate taxpayer, the benefits go further. If we assume a salary of £65,000 and contributions of £500 per month (£6,000 per year) into a pension then the following happens:

You make your regular pension contribution of £500 and receive basic rate tax relief of £125.

Your basic rate threshold for income tax purposes (£50,000 as standard in 2021/22) is raised by the amount of the gross pension contribution (in this case £7,500).

On your tax return, you then put in the details of your pension contributions.

The contributions effectively raise your basic rate threshold for the amount of the contribution (eg to £57,500 in this example).

This results in you paying 20% tax on a further £7,500 of your earnings instead of 40% tax which saves you a further £1,500 of tax over the year.

In summary, it means that for a cost of £6,000 you get £7,500 in your pension and pay £1,500 less tax on your earnings. Even if you were to keep your pension in cash (which you wouldn’t) then this is a guaranteed return on your contributions.

When it comes to taking your pension, under current legislation you could take 25% as tax-free cash and any income would be taxed at your marginal rate. Therefore, this becomes even more attractive if you are a basic rate taxpayer in retirement.

If you would like to discuss whether it is relevant to your own situation to make pension contributions with a view to lowering your income tax liability, please give us a call.

What happens on death?

Wed, 14 Jul 2021 12:35:58 GMT

Whilst it is a topic not everyone likes to discuss, part of any good financial plan is preparing for what happens in the event of your death.

In its simplest form, this can be ensuring you have a Will and it is up-to-date through to discussing and planning different ways of reducing Inheritance Tax where appropriate.

Like all finances, everyone’s situation is unique and one person's view on Inheritance Tax can be very different to the next.

Being aware of the IHT rules and what can happen if you don’t have an up-to-date Will can often be the trigger for people to sort their legal paperwork out.

We work closely with some specialists in Wills and Trusts so we can provide reassurance that existing arrangements would achieve the desired outcome or to put in place new arrangements.

It is also important to be aware that some life events also revoke these documents so regular reviews are always advisable.

If you feel that your IHT planning should be reviewed, please get in contact with us to find out how we can help.

What if you live?

Wed, 02 Jun 2021 12:43:33 GMT

As well as helping clients fulfil their financial goals and objectives, we also discuss with them what happens when things don’t go according to plan.

Often though, many people plan what they want to happen on their death but forget to consider what happens while they are alive yet do not necessarily have the capacity (mentally or physically) to sort things out for themselves.

Unfortunately, people assume this happens in later life but we often come across these issues with younger people who have suffered ill health or been involved in an accident.

We always recommend clients have in place Lasting Powers of Attorney (LPA’s) and these come in two types, Health & Welfare and Property & Finance.

Whilst the first step is to complete the initial forms, this will not assist an immediate emergency unless they are registered for which the government does make a charge. However, in our opinion this is a price worth paying for peace of mind that you have the people you want acting on your behalf.

EPA’s (Enduring Powers of Attorney) that were in place before LPA’s are still valid, however if you wish to change your attorneys then you would have to write the new style LPA’s.

You can put LPA’s in place yourself by using the following link https://www.gov.uk/power-of-attorney

Alternatively, we are always happy to talk through any situation and assist where appropriate.

Do give us a call if you have any questions regarding this area or to find out how we can help.